Merchant Innovation

Macy’s Launching Discount Backstage Pilot Stores

To boost sales, Macy’s has mentioned in the past that it may look into discount retail options. It appears that day is closing in for the retailer as the first four pilot stores in Macy’s off-price initiative, known as Macy’s Backstage, will open in the metropolitan New York City area this fall, the company said yesterday (May 5).

Averaging 30,000 square feet, the stores will sell men’s, women’s and children’s apparel and housewares and jewelry, among other items. In addition to clearance goods, discounts will range from 20-80 percent off of original prices. One of the stores – which will be located in Brooklyn, Queens, New Hyde Park and Huntington – will test a café.

Macy’s charge cards will be accepted, but coupons will not apply, and there will also not be promotional events, the company said in its release announcing the pilot locations. Macy’s announced in its fourth quarter earnings call with analysts that it plans to boost spending to $1.2 billion in 2015 (a 6 percent increase) to open discount shops. These off-price stores will be opened in attempt to sell returned or canceled orders at a reduced price, Macy’s executives said in February.

Marketing will be conducted across both traditional and local channels.

“Backstage is a new retail concept that the Macy’s team has built from scratch over the past six months,” said Peter Sachse, Macy’s chief development and innovation officer. “As with all of Macy’s innovations, we will test and learn to see what resonates most with customers so we can adjust before rolling out additional locations.”

He also spoke toward the benefits the Backstage pilot stores will provide to its customer base.

“We believe we can deliver a whole new level of value to customers who appreciate fashion and love to hunt for a bargain,” Sachse said.




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